February 23, 2016
CALGARY, ALBERTA -Whitecap Resources Inc. ("Whitecap" or the "Company") is pleased to announce that as a result of the encouraging results obtained from the consolidation of its working interest at Boundary Lake in northeast British Columbia it has increased its 2016 production guidance and has entered into a $95 million bought deal equity financing (the "Financing").
Whitecap's Boundary Lake asset which is currently under waterflood was originally acquired in May 2014 and was producing 1,150 boe/d at that time. The property is a conventional waterflood asset which requires lower capital cost open-hole completions resulting in excellent capital efficiencies. The waterflood has been maintained since 1965 resulting in a very low and predictable annual decline rate of less than 5%.
In late December of 2015, Whitecap consolidated its interest at Boundary Lake for total consideration of approximately $93.4 million, which increased our average working interest to 90% and added 1,700 boe/d of low decline, high netback production, 8.6 MMboe of total proved reserves and 11.5 MMboe of total proved plus probable reserves which are included in Whitecaps independent year end reserves report as at December 31, 2015 and 29 net locations, increasing our drilling inventory at Boundary Lake to 100.3 net locations.
Since Whitecap completed the Boundary Lake acquisition, its drilling program results have exceeded expectations. Whitecap drilled three wells in the area, with an average IP(30) rate of 190 bopd, significantly higher than our initial forecast, resulting in total current production of 4,600 boe/d at Boundary Lake which includes production from the three wells. Whitecap has also drilled two additional wells in Q1/2016 at Boundary Lake which are still under completion. Average drill, complete and equip and tie-in cost per horizontal well is estimated at $2.2 million. The results from the initial five well drilling program are very encouraging and underpin the quality of our inventory in this area.